Germany Crypto Mining Tax Guide 2025

Finanzamt Treatment of Mining

German tax law treats crypto mining as income-generating activity:

• Mining rewards = taxable income when received
• Classified as self-employment or commercial trade (Gewerbe)
• Taxed at personal income rate (14-45%)
• Commercial miners also pay trade tax (Gewerbesteuer)
• Mined coins subject to 10-year holding period

Commercial vs Private Mining

Commercial Trade / Gewerbe (Most Miners)

If mining systematically for profit:

• Register trade with local Gewerbeamt
• Report on Anlage G (commercial income)
• Subject to Gewerbesteuer (trade tax, ~3.5-14%)
• Also pay income tax (14-45%)
• Can deduct business expenses
• Depreciate equipment
• May require IHK membership (Chamber of Commerce)

Self-Employment / Freiberufler (Small-Scale Miners)

If mining as self-employed individual:

• Report on Anlage S (self-employment income)
• Income tax only (14-45%, no trade tax)
• Can deduct business expenses
• Depreciate equipment
• No Gewerbe registration needed

Hobby Mining (Very Rare Classification)

If truly casual and not profit-seeking:

• Report on Anlage SO (other income)
• €256 allowance for "other income"
• Cannot deduct expenses
• Finanzamt rarely accepts this classification for mining

How Finanzamt Determines Classification

Most mining = Gewerbe (commercial trade) if:

• Profit intent: Clear goal of making money
• Systematic operation: Regular, organized activity
• Independent activity: Not employed by someone
• Participation in market: Selling mined crypto

Example: Commercial vs Self-Employment

Commercial (Gewerbe):

• Purchased €50,000 in ASIC miners
• Dedicated facility, systematic operations
• Registered Gewerbe with local authorities
• Mining as business activity
• Subject to trade tax + income tax

Self-Employment:

• Small-scale mining with personal equipment
• Annual income €10,000
• Not registered as Gewerbe
• Income tax only (no trade tax)

Income Calculation

When is Income Recognized?

When you receive coins:

• Solo mining: When you successfully mine a block
• Pool mining: When pool credits your account

Fair Market Value

FMV = EUR value at time of receipt:

• Use exchange rate from reputable exchange
• Be consistent with valuation method
• Document source and rate

Example: Income Calculation

• March 15, 2024: Receive 0.05 BTC from mining pool
• BTC price: €60,000
• Taxable income: 0.05 × €60,000 = €3,000
• Cost basis for future sale: €3,000
• ⚠️ 10-year holding period starts

Trade Tax / Gewerbesteuer (Commercial Miners)

How It Works

Gewerbesteuer = municipal trade tax:

• Rate: ~3.5-14% (varies by municipality)
• Applied to business profits
• €24,500 exemption (Freibetrag)
• Partially creditable against income tax

Calculation

Trade Tax = (Profit - €24,500) × Municipal Rate

Example: Trade Tax

• Mining profit: €50,000
• Less exemption: €50,000 - €24,500 = €25,500
• Municipal rate: 10%
• Trade tax: €25,500 × 10% = €2,550
• Plus: Income tax on €50,000

Deductible Expenses

Common Deductions

1. Electricity: Power consumption (business portion)
2. Equipment: Mining hardware (depreciation)
3. Rent: Dedicated mining space
4. Internet: Business portion
5. Cooling: HVAC and ventilation
6. Repairs and maintenance: Equipment repairs
7. Pool fees: Mining pool charges
8. Software: Mining software
9. Professional fees: Tax adviser, accountant
10. Insurance: Business insurance

Equipment Depreciation (AfA)

Mining equipment = depreciable asset:

• Useful life: 3 years (typical for mining hardware)
• Linear depreciation: 33.33% per year
• Small business rule: Items <€800 can be expensed immediately (GWG)

Example: Depreciation

• Buy €30,000 in ASIC miners
• 3-year useful life
• Year 1-3: €30,000 ÷ 3 = €10,000 deduction per year

Example: Small Items (GWG)

• Buy 5 GPUs at €700 each = €3,500
• Each GPU <€800
• Immediate deduction: €3,500 in year of purchase

The 10-Year Holding Period Rule

Why Mining Triggers 10 Years

German tax law (§23 EStG):

• Normal crypto: 1-year holding period for tax-free gains
• Income-generating crypto: 10-year holding period
• Mining = generating income
• Therefore: mined coins require 10 years to be tax-free

Implications

• Sell mined coins within 10 years = taxable gain
• Gain = proceeds - cost basis (mining income value)
• Taxed at personal income rate (14-45%)
• After 10 years = tax-free

Example: Selling Within 10 Years

• Jan 2024: Mine 1 BTC (income: €40,000)
• Already paid income tax on €40,000
• Cost basis: €40,000
• Jan 2027 (3 years later): Sell for €80,000
• Gain: €80,000 - €40,000 = €40,000
• Taxable: €40,000 (held <10 years)
• Tax at marginal rate: e.g., €40,000 × 35% = €14,000

Example: Selling After 10 Years

• Jan 2024: Mine 1 BTC (income: €40,000)
• Jan 2035 (11 years later): Sell for €200,000
• Gain: €200,000 - €40,000 = €160,000
• Tax: €0 (held >10 years)

€600 Private Sales Exemption

Doesn't typically help miners:

• €600 exemption applies to private sales (Privates Veräußerungsgeschäft)
• Mining income = business/self-employment (not private sales)
• Exemption doesn't apply to business income

Income Tax Rates

Plus solidarity surcharge (5.5% of tax) for higher incomes

Plus trade tax (~3.5-14%) for commercial miners

How to Report

Commercial Miners (Gewerbe)

1. Register trade with Gewerbeamt
2. Anlage G: Commercial income and expenses
3. Gewerbesteuererklärung: Trade tax return
4. Anlage SO: Private sales (if selling within 10 years)
5. File by July 31 (or later with tax adviser)

Self-Employed Miners

1. Anlage S: Self-employment income and expenses
2. Anlage SO: Private sales (if selling within 10 years)
3. File by July 31 (or later with tax adviser)

FIFO Method

Germany uses FIFO (First In, First Out):

• First coins mined = first coins sold
• Important for 10-year holding period tracking

Record Keeping

Keep records for at least 10 years (due to 10-year holding period):

• Mining pool statements (dates, amounts, EUR values)
• Wallet addresses and transaction hashes
• Equipment purchase invoices
• Electricity bills with business use calculation
• Repair and maintenance receipts
• Pool fees and software subscriptions
• Depreciation schedules
• Gewerbe registration documents
• Which coins were mined (for 10-year tracking)

Tools for Mining Tax

• Koinly - Germany tax reports, mining income tracking
• Accointing - Swiss/German focus, Finanzamt reports

Common Mistakes

1. Not understanding 10-year rule: Biggest mistake for German miners!
2. Not registering Gewerbe when required: Can result in penalties
3. Forgetting trade tax: Commercial miners pay income tax + trade tax
4. Using 1-year holding period: Mined coins require 10 years
5. Not tracking mining dates: Need to know when 10 years starts
6. Missing depreciation deductions: Equipment is depreciable
7. Not keeping 10-year records: Need proof for tax-free treatment

FAQs

Is crypto mining taxed as income in Germany?

Yes. Mining rewards are income from self-employment or commercial trade, taxed at personal income rate (14-45%) plus trade tax if commercial.

Do I pay tax when I mine or when I sell?

Both. Income tax when mined, then capital gains tax when sold (if within 10 years).

What is the 10-year holding period for mining?

Mined cryptocurrency must be held for 10 years (not 1 year) to qualify for tax-free gains. This is because mining generates income, triggering the extended holding period rule (§23 EStG).

Do I need to register a Gewerbe?

Most systematic mining for profit = yes. Small-scale miners may qualify as self-employed (no Gewerbe needed), but this is rare.

What is Gewerbesteuer?

Trade tax (Gewerbesteuer) is a municipal tax (~3.5-14%) on commercial business profits. Commercial miners pay this on top of income tax.

Can I deduct mining expenses?

Yes, if commercial or self-employed. Deduct electricity, equipment (depreciation), rent, and other business expenses.

What if I sell mined coins before 10 years?

Gain is taxable at personal income rate. You've already paid income tax when mined; you'll pay again on appreciation if sold within 10 years.

Can I use the €600 private sales exemption?

Generally no. Mining income is business/self-employment income, not private sales. The €600 exemption typically doesn't apply.